Heat is on: AG says Biscuit Run deal under scrutiny

news-biscuit-craig-smBiscuit run investor Hunter Craig and DMB violinist Boyd Tinsley joined Governor Tim Kaine a year ago at the Monticello Visitor's Center to celebrate the state's purchase.

file photo by courteney stuart

Recently disclosed details of the Biscuit Run state park deal have prompted more than public outrage–- they may have prompted an investigation into the transaction that some allege was a government bailout of wealthy investors at taxpayers' expense.

"I can tell you and therefore reassure the public that the Biscuit Run matter is being reviewed by appropriate parties," writes Brian Gottstein, spokesperson for Attorney General Ken Cuccinelli, in an email. "I cannot say any more than that without potentially compromising an investigation."

As reported in the Hook's January 6 cover story, "Bad Men? New numbers show spiraling costs of Biscuit Run," the owners sold the 1,200-acre property to the state for $9.8 million in December 2009. Several months later, the Virginia Department of Taxation issued $11.7 million in tax credits, more than doubling the price. The former owners–- who include developer Hunter Craig and music mogul Coran Capshaw–- have appealed to the state to issue millions more.

Meanwhile, the new governor–- a Republican who initially endorsed the deal–- now appears to be distancing himself from something arranged by his predecessor, Tim Kaine, who heads the Democratic National Committee.

"The acquisition of this land occurred during the Kaine Administration, not this one," writes Bob McDonnell's spokesperson, Stacey Johnson. "This Administration was not involved in that process."

The process, according to documents anonymously mailed to the Hook around Christmas, includes a questionable appraisal that might trigger millions more for the speculators. And yet, if not for the documents, the taxpayers who'll end up footing the bill would not have known that an Orange County appraiser asserted that the land was worth nearly $88 million–- nearly double what the speculators paid during the height of the real estate bubble.

"This type of secrecy is the worst," says Jim Moore, a government transparency advocate who's worked in real estate development. "I guess their excuse would be that it's socially acceptable to keep large private gifts private–- that making them public might discourage the wealthy from providing these gifts. But as we can now see, how can we tell that they're gifts?"

Moore says he hopes that the state will open the Biscuit Run files, change the laws that shrouded it, and punish any wrongdoers. However, Delegate David Toscano says he doesn't believe an investigation is actually taking place.

"I do know that [Department of] Taxation would look at this thing first, but there may be other places where it would be reviewed as a matter of course," says Toscano, who says use of the word investigation "implies something I don't think is happening here."

Toscano notes that he doesn't consider an investigation appropriate.

"Any time you have a transaction of this size, you're going to have a lot of differences of opinion about value," says Toscano. "If they can't agree, then there is some kind of court remedy to determine what that value is."

According to legal analyst David Heilberg, the AG's office may have authority to investigate even though it handled the real estate closing. And he notes that if the state allows the massive $88 million appraisal or even its own $39 million appraisal, another potential stumbling block for the investors hoping to recoup losses might come if they attempt to use their charitable donation for a federal tax deduction, opening up an opportunity for the IRS to investigate the land's actual value.

One person who won't be getting any tax credits or deductions from the Biscuit Run deal is DMB fiddler Boyd Tinsley. Although he was presented as a Forest Lodge investor at a January 8, 2010, event announcing the sale, and granted interviews about the "gift," a source close to the deal says that, in fact, Tinsley–- who spoke about his close personal friendship with Governor Kaine and said he'd learned about the transaction only weeks before the event–- never had any money invested in Biscuit Run.

71 comments

Towler January 18th, 2011 | 4:14pm

Maybe a law should be passed that for any land the State buys, an appraisal paid for or provided by the sellor cannot legally be used for the transaction. Any appraisal done by the sellor would be of informational value but not legal value.

I'm happy it became a park but we need to get the straw out our mouth and get off the turnip wagon we came into town on.

Bill Marshall January 16th, 2011 | 7:42pm

additionally the guy at the service staiton might sell his older balancer and tire machine to a guy with a lot of ambition but only a small amount of money to invest... you know... trickling it down... so to speak....

St. Halsey January 11th, 2011 | 4:49pm

Interesting that Boyd Tinsley never had any money in the deal, is he just Coran Capshaw's beard in this deal? It's hard to understand why Boyd is pictured celebrating this deal with Gov. Kaine .

AT January 11th, 2011 | 4:51pm

Who is David Toscano? He's a delegate? - oh that's right he's the guy we only hear from when he puts out his campaign signs. Maybe he and Creigh need to sit down and get their stories worked out. They are in the same party, right? - you know the one whose governor helped with the deal. Its the party of the people not big business....yeah right...

ken jamme January 11th, 2011 | 4:28pm

Grease Machine

Tracy Carver January 11th, 2011 | 3:48pm

I wonder who elso in the state was receiving favors for helping this deal happen. Greased pigs lead to greased palms.

nicknameoscar January 12th, 2011 | 7:18am

I am with Yes - why should the taxpayers have to pay at all. Oh that's right, these wealthy people were too big to fail so we should help these unfortunate souls out - GIVE ME A BREAK !!

what is this I don't even... January 11th, 2011 | 5:06pm

This is one of the most poorly written articles I have ever read. Who am I supposed to be angry at again, and why?

Dahmius January 11th, 2011 | 8:40pm

Nero was a fiddle player, too.

cmorr January 11th, 2011 | 7:44pm

What a sleezy thing to do, especially in this economy! While schools are getting cuts, the rich get more money in their pockets! How can they live with themselves? How sleezy!

Brad January 12th, 2011 | 12:39am

It would be nice just to know the bottom line...did the investors lose significant money on the deal? Period. If so, then the citizens of Charlottesville did indeed get a gift in my opinion, and case closed. We do not need to know the amount...just that it was substantial. It's okay if the deal helped them minimize their loss. Who would blame anyone, large or small, for that? PS. (Sadly, it does seem that someone always has to be blamed for everything nowadays though, especially if they are greedy developers, except the ones who developed your neighborhood when prices always went up.)

Yes January 12th, 2011 | 2:37am

did the investors lose significant money on the deal? Period. If so, then the citizens of Charlottesville did indeed get a gift in my opinion, and case closed.
***
This doesn't make sense. If the developers lost some money, then it therefore makes sense to create a park in the development area and give the developers an excessively large tax credit? Huh? Perhaps the fair thing for the taxpayers was to allow the developers to lose even more money based on their bad investment.

Ken Betts January 12th, 2011 | 7:43am

Look at the names involved. All uber liberal progressive anti-capitalist Democrat politicians and celebrities. They all rant about the evils and unfairness of "the system" and profess to be the defenders of the "working man and the little guy". And they all use their connections to gorge themselves at the public trough. Disgusting but oh so typical of the hypocrital left. If the people involved were Republicans/conservatives they would be robber barons, right?

I don't blame the developers for trying to make a profit or minimize a loss. The process is even O.K. IF the appraiser has any ethics which is where the problem truly is.

The appraisers who will give you any number for a fat fee are a dirty little secret and are well known by those who are willing to pay for their services. This is who should be rung up the flagpole.

? January 12th, 2011 | 3:34pm

Hunter Craig is not a liberal. Get your facts right those that say he is!

Antoinette W. Roades January 12th, 2011 | 5:34pm

cookieJar:

Thanks for the vote of confidence, but even if I were inclined to run for Council I'd be in trouble if I won. I suffer the civic disability of being a day person. My personal constitution just won't let me undertake meetings that begin at 7 pm and sometimes run past midnight -- a non-negotiable requirement for full participation in public affairs hearabout. (The last time I voluntarily stayed up past midnight was for my high school graduation all-night party.)

There are lots of good people around here whose circadian rhythms don't preclude their serving though. And I'd strongly suggest that you seize any chance to single-shot vote for any one of them who hasn't been handpicked by the current insiders even if his or her politics don't track precisely with yours. Breaking up the current clot is more important than any particular position or label. Any outsider would be a potential whistle-blower.

Antoinette W. Roades January 12th, 2011 | 5:37pm

cookieJar:

Oops. That should be "hereabout," of course, not "hearabout." Call it a Freudian slip by someone who often feels unheard.

Barbara Myer January 12th, 2011 | 9:09pm

Yes, small town, but the city types pay a quarter more in property tax rates to do their kowtowing: to whomever they may kowtow. The county types pay less, their supervisors gripe more about 'revenue sharing' (which mathematically could be to their benefit some years), and provide for fewer poor and underserved while griping.

I really want to rescind the word "Charlottesville" from anyone not paying for the privilege of living there. I think the distinction is important. There is no "greater Cville area". There is a county growth area usurping the name of "Charlottesville" while claiming the advantages of the county.

Dahmius January 13th, 2011 | 9:50am

Antionette, please don't preclude youself. You could just sleep through the meetings like Mr. Huja does.

OTISdaDrunk January 19th, 2011 | 3:22pm

The National debt did not explode because of supply side economic it exploded because congress spent more than it took in.

If you get a 10k a year raise but then spend 20k a you cannot say that the supply side of the equation was at fault.

The facts are that government revenues increased with the lower tax rate. They got more they just spent more and a half.

confused easily January 13th, 2011 | 11:25pm

Maybe the Breedens can use some of the $46 million they received from Hunter's investors to offset their future property tax bills.

Caesonia January 16th, 2011 | 11:33am

Bill, Conservatives didn't bet on equities, they bet on financial derivatives, which is entirely different. And by the way, plenty of people on the left have 401(k)s. Those are another great big scam used to bleed the middle class not only of SS, but their savings as well.

The facts that you need to accept are that yes, while the GOP had control of all three branches of Government, they sank the nations economy. They pushed Greenspan to keep interest rates artificially low. They chose to rubber stamp massive spending bills and create a bigger government that wasn't paid for. They chose to cut taxes massively on the wealthy. They chose to keep not one but two wars off the budget and have them unpaid for as well. And? they did not create jobs, as promised, via the trickle down lie. Just before the great evaporation occurred, all they had managed to create were a sum total of 1 million jobs in 6 years.

Americans are guilty of doing many things, like buying into the fantasy, but the fact is, the legislation, was written by the GOP.

Antoinette W. Roades January 15th, 2011 | 1:42pm

democracy:

I have no idea if and/or to what degree the various local Charles Armstrongs -- of whom there are several extras -- might be relatives by blood, marriage, or any other tie. I do know that Southern Development's Charlie Armstrong is Charles T. Armstrong Jr. while I believe that Real Estate III's Charley Armstrong is Charles R. Armstrong.

That being the case, SD's Charlie Armstrong may be kin to Piedmont Housing Alliance's CEO Stu Armstrong (Stuart C. Armstrong) only via their considerable skill at winning favored treatment from City government. (And in the for-what-it's-worth department, I note that SD's Charlie Armstrong pays his home's property taxes to Albemarle County while PHA's Stu Armstrong, whose livelihood depends directly on regular infusions of taxpayer money, pays his home's property taxes to eminently affordable Nelson County.)

And re favored treatment for SD: For an oven-fresh example, note on City Council's agenda for Tuesday, 18 January, the first reading of an ordinance that would sell a City-owned parcel on Elliott Avenue to Southern Development for $40,000. This parcel (Tax Map 29, Number 266c)is both more prominently located than my vacant Oak Street lot (Tax Map 29, Number 126). And at just short of 8,266 square feet, the City parcel is notably larger than my right about 6,000 square foot parcel. Nevertheless, my parcel is assessed at $60,300 -- based, as an assessor archly informed me when I complained of its increase, on its "market appeal" -- whereas the City parcel in question is assessed at $50,000. So why the drop to $40,000 for good friends at SD? Quoth Jim Tolbert, the parcel's condition will present SD with "significant clean up costs." Ohhhhhhhhhh. Of course. Sounds perfectly fair and consistent to me.

Maybe January 15th, 2011 | 11:15pm

I get it Bill. Underfund schools. Under-educate kids. Under regulate everything. Create a society of "consumers without borders" who, when the endless credit they are used to runs out: Get The Blame.

Bill Marshall January 15th, 2011 | 12:09pm

Democracy, You admit that both sides of the aisle are bad and then go on a rant about how the conservatives are worse. Conservatives did not cause this recession. A comibination of greedy people spending money they don't have caused it. The conservatives on wall street borrowed money and bet it on equities and the man in the street borrowed money and spent it on big screens, cars, vacations, clothes, laptops, snd bigger houses than they needed.

It only collappsed when the people who loaned the money wanted it paid back. Duh...

The Government spending was with borrowed money and since we are still borrowing more than the interest on the already borrowed money that spending actually kept the recession from occuring for years.

The consumer is to blame for this. "buyer beware". "if it sounds too good to be true it probably is" "nobody rides for free"

We were all told this when we were growing up but too many of us did not listen.

The governments imvolvment in creating this mess was not its spending, but its loose regulations that allowed banks to loan people money who did not qualify. They allowed loan sharking.

You know those conservatives like Barney Frank and Maxine waters who voted to allow fannie and freddie to make loans to people who didn't come close to qualifiying. Now I will grant you that bankers siezed the oppotunity to exploit the system and make a buck, but we know they are snakes upfront. They admit it. The politicialns are the ones who make their money in the back room and tell a story. all of them. No politicians hands are clean.

Your soapbox is made of cardboard.

democracy January 19th, 2011 | 9:03am

I know I am wasting my time trying to convince Bill Marshall and other conservatives that supply-side economics ("trickle down") does NOT work. They play an ideological whack-a-mole game. Smack down a baseless, unsubstantiated claim and they pop up with another (just as baseless and unsubstantiated). Or resurrect an already-beaten-down one.

The public record is clear. Under supply-side economic policy, budget deficits exploded and the national debt ballooned, and the economy was brought to its knees. The rich got richer (but ended up paying less proportionally in taxes), the poor got poorer and the middle class got squeezed. The middle class continues to get squeezed. Yet, one hedge fund executive recently said that "the hollowing-out of the American middle class didn't really matter."

That statement comes from a guy whose income (derived from managing financial investments of the wealthy) is termed "carried interest" and is taxed at a flat 15 percent rate, a rate that is lower than that of his chauffeur or gardener or house maid, and a rate that is lower than that paid by middle class Americans, the very same ones who got stuck with the bill for the Bush-imposed TARP legislation that bailed out the big investment banks and hedge funds. And the same ones who pay the bill for the nearly interest-free funds that banks and hedge funds access from the Federal Reserve to solidify their very private profits.

This, Bill Marshall is corporate socialism on a massive scale. As the corporate elite narrow their political and economic ideology, spurred on by conservative Republicans, they contribute to those who will do their bidding (and yes, Bill, there are Dems who are thusly tainted). And that, Bill, is called plutocracy.

As I've said before, conservatives and the plutocrats take no responsibility for the damage they caused. Even Alan Greenspan, who presided over the mortgage bubble and wide-spread deregulation of Wall Street is now alarmed. Greenspan, the disciple of Ayn Rand (what a kook) and the Austrian school of laissez-faire economics, sees the economic inequality and income stratification (and huge debt) generated by supply-side policies as a "national crisis" and recognizes that "something has gone very, very wrong." Indeed.

Conservatives and plutocrats take a "it's-not-my-fault" mentality in their approach to fixing what's gone "...very, very wrong." They (and presumably you too, Bill Marshall) want more of the same.
They refuse to acknowledge complicity and cause in the economic collapse, and they want no part in cleaning up their mess.

One Wall Street upstart told a member of Congress engaged in financial reform legislation that if "carried interest" were treated as ordinary income (and it should be), "the government won't get a single penny more from me in taxes" because he'd hide the money in foundations and tax shelters, and he'd make sure that none of his money was "going to be wasted in your deficit sinkhole."

Don't you see the arrogance, the sheer hypocrisy, the complete lack of commitment to anything other than self in that statement?

That statement reflects what is now and has been the political platform of the conservative Republican Party. The policies built on that platform are steadily, and on a wholesale basis, exporting dollars, jobs, national wealth, and the American standard of living.

The history is being written now. It really isn't necessary to return in a hundred years and read the texts to be able to say "I told you so."

Ken Betts January 12th, 2011 | 2:28pm

I think you all miss my perhaps misguided attempt at sarcasm. Of course all these characters are capitalists - to the max. But, of course, they all are so insipidly compassionate, kind hearted souls who, for public consumption, must profess to be oh so caring about the working man in a liberal college town where money is derided as dirty by the very people who continually game the system for their private gain. Like all liberal Democrats they are hypocrits! If this cast of characters were known for their contributions to conservative causes they would be strung up. But because they are "cool" libs no big deal!

S January 13th, 2011 | 12:04pm

When Biscuit Run was sold by the Breedens...to Craig et al. did the Breedens have it in any special tax program (for rural preservation etc) or had they been paying taxes on the land in no special program?

Horse Feathers January 13th, 2011 | 1:42pm

In Charlottesville you either ride the horse, or muck the stall. Guess which one is the taxpayer. Also I love it when the rich fight the rich. So Classy

democracy January 15th, 2011 | 7:17am

@ Antoinette...didn't know that. Are they related in any way? Just wondering.

@ RT Greenwood.....and your point is what?

@ warnBond...the lack of character, as you point out, is not restricted to political party...nor is hypocrisy...nor disinterest in and lack of commitment to the core values and principles of democratic governance. However, it IS a matter of public record that conservatives (Ronald Reagan, a conservative icon, a prime example) say one thing and do another, repeatedly.

Examples litter the history of the last thirty years. For starters, though, Reagan talked incessantly about a balanced budget but never submitted one. Not once, Not even close. Reagan also claimed he could cut taxes ($750 billion worth, directed at corporations and the wealthy) and increase defense spending (by $1 trillion) and balance the budget. That is the core idea and philosophy and promise of supply-side economics advocates, almost all of whom are conservatives. The big lie in this is that tax cuts do NOT pay for themselves, and the result of 12 years of Reagan-Bush1 administrations was more than a quadrupling of the national debt, a debt that had taken 200 years to accumulate. (@ RT...you voted for Reagan [twice] didn't you? )

Worse, the United States went from being the biggest creditor nation in the world to its biggest debtor. Thetrich got richer, the poor got poorer, and the middle class got squeezed. Trade deficits soared, and as money flowed out of the U.S. (we bought more from other countries than we sold), jobs and (entire industries) began to follow. The wholesale decline in the American standard of living (one that continues today) began.

Clinton, whatever his character flaws (and there were many), did see the folly in supply-side economic policy, and he grasped the danger of the expanding national debt. In 1993 Clinton got his deficit reduction act, which raised taxes on the wealthy and corporations, passed in Congress withOUT a single Republican vote. Not one. They claimed it would ruin the economy and cost millions of jobs. The historical record shows that more than 22 million jobs were created, all income levels benefited from the economic growth (this is called promoting the general welfare), and the federal budget got balanced. Multiple times. Surpluses were generated they were targeted to pay down debt and secure Social Security.

Then came Bush2 (in another extraordinary act of hypocrisy, a conservative majority on the Supreme Court rejected its avowed belief in the sanctity of state laws and "originalism," and invoked the 14th amendment's equal protection clause, a clause they've never given much credence, to stop the counting of legitimate votes [and voting is the essence of popular sovereignty, the foundational value of democracy] in Florida to select Bush as president, in effect saying that discerning the intent of voters, the common standard in most state voting laws, would subject Bush, a conservative political candidate, to "irreparable harm." Instead, an entire nation got subjected to "irreparable harm.")

The very first focus of the Bush2 administration was supply-side tax cuts. Conservatives are fond of saying that the first priority of government is national defense. But the record is clear that the Bushies ignored repeated warnings about terrorist threats. See:

Bush2 got his tax cuts. He promised the same conservative tripe" more jobs, more revenue, etc. But combined with deregulation of Wall Street, and the failure to fund two wars (one of which was promoted using manufactured "intelligence," "patriotic" political brow-beating, and assurances that Iraq had WMD and was tied to 9/11 and to al-Qaeda), and rampant spending, budget deficits returned, the national debt ballooned, and the economy was broken. Millions of jobs were lost. The mortgage mess continues to play out.

The ultimate hypocrisy? Conservatives want even MORE of their very bad medicine (and they are telling the same big lies), and they refuse to take any responsibility for the economic, political, and social damages they've caused, even though conservatives seem to favor "accountability" for everybody else (especially public schools and the poor).

So warnBond, I'm sticking to the point, and I'm trying to be very clear. Conservative political and economic ideas, as they've existed for the last three decades, represent a very real lack of democratic character. Those conservative ideas, put into practice, represent a very real weakening not only of what might be called the American ethos, but also of the standard of living for most citizens.

@ Nancy Drew...thanks.

Jessie Gibson January 15th, 2011 | 6:28pm

I'm still waiting for the story about Coran Capshaw's drug-dealing mis-adventure in which two people were murdered in Norfolk, in the mid-70s, as well as his follow-up visit to the pen for yet more drugs, where he first dreamed up Van Riper's Music Festival.

democracy January 15th, 2011 | 8:26pm

@ Bill Marshall

Perhaps you misread, or misunderstood my "rant." What I said, in fact, is that a "lack o character" is not limited to political party.

And I did say that conservatives are repeatedly, consistently and egregiously the party of hypocrisy. And, I cited the public record, which, I notice, you do not contest (nor can you).

You say my "soapbox" is made of cardboard (I disagree...as I point out, everything that I cite is verifiable).

Even if that WERE true (and it is not), at least my argument has some substance. Yours is entirely fantasy.

Yes January 16th, 2011 | 8:56pm

Trickle down would work fine of congress would simply stop spending all they get and then some.
***
So, Bill, I'm assuming that you liked the Clinton administration, which cut capital gains taxes and produced a budget surplus, and hated the Reagan and George W. Bush administrations, which dramatically increased budget deficits.

Oh, and do you actually have any empirical evidence that tax cuts increase government revenue?

Bill Marshall January 16th, 2011 | 10:00pm

I liked Clinton. (except of course his taste in women)
He also worked with the republican congress to slow down welfare which got a lot of lazy people off the rolls and back to work.

Here is some "empirical evidence" It is from a not so great source though (the us congress)

These big companies that pay sales tax on everything consumed, pay property taxes on everything they own and pay out billions in salaries all of which is taxed, legally move their offices to friendlier places taxwise to protect their profits. This may seem un american to you, but it is no different than someone taking a deductuion for their mortgage on their tax return or moving to the county from the city for the tax benefit. Virgina is wooing California and Illinos busineeses away from those high tax states.. Who is the bad guy in that scenario?

By the way Bill Clinton didn't create any jobs except for "special prosecuter" ken starr's. The internet did and the resulting explosion of the bubble that occured was responsible for the job losses and stifled creation along with 9/11 for 2001-2003.

I have no problem with fixing the tax code, but I don't blame "neo-cons" for creating it. Democrats take money from big corporations and nobodys hands are clean.

The difference between company that pays out billions in salaries and manages to skate on its corporate taxes is that the government does not have another 100k people on welfare and that company is not a burden on the rest of us.

I am all for helping the poor help themselves and taking care of those who cannot. That fact of the matter is that way too many people simply milk the system.

My example of a tax credit given to a business versus money given to a welfare queen is irrefuatable. It is trickle down and it works.

It works even better if instead of buying something outright the business used the ongoing lower rate to leverage a loan. In this example 15k a year means a 100k ten year loan. that allows most businesses to expand and create jobs.

The other difference is that the business actually WORKED for their money.

Economists are in virtual agreement that tax cuts do NOT pay for themselves....it's ONLY the discredited Austrian school of economists (Hayek's disciples) who keep making this false, but effective, claim.

It reminds me of the Simpson's episode where Lisa tells Homer his line of thinking is akin to saying the rock she holds in her hands keeps tigers away. Homer says, "Oh, how does it work?" Lisa: "It doesn't, but you don't see any tigers do you?" Homer: "Lisa, I'm going to buy that rock from you."

Americans keep buying the big lie that giving more money to the already-wealthy will trickle down. It doesn't.

Here are Bush administration economists on tax cuts:

Robert Carroll, deputy assistant secretary for tax analysis at the U.S. Treasury Department during Bush’s second term, as quoted in the Washington Post on October 17, 2006:

Ã¢â?¬Å?As a matter of principle, we do not think tax cuts pay for themselves.”

Edward Lazear, chairman of the Council of Economic Advisers in Bush’s second term, in testimony before the Senate Budget Committee, September 28, 2006 (p. 11):

Ã¢â?¬Å?Will the tax cuts pay for themselves? As a general rule, we do not think tax cuts pay for themselves. Certainly, the data presented above do not support this claim. Tax revenues in 2006 appear to have recovered to the level seen at this point in previous business cycles, but this does not make up for the lost revenue during 2003, 2004, and 2005.”

At his Senate Finance Committee confirmation hearing on June 27, 2006, Bush’s nominee to be Secretary of the Treasury, Henry Paulson, was asked if he thought that tax cuts paid for themselves. He replied (p. 18):

Ã¢â?¬Å?As a general rule, I do not believe that tax cuts pay for themselves.”

In a 2006 article published in the Journal of Public Economics, economist Greg Mankiw, who chaired the Council of Economic Advisers during Bush’s first term, estimated the long-run revenue feedback from a cut in capital taxes at 32.4 percent and 14.7 percent for a cut in labor taxes.

A 2006 analysis of extending the 2001 and 2003 Bush tax cuts by the Republican-leaning Heritage Foundation estimated that only 30 percent of the gross revenue loss would be recouped through behavioral effects and macroeconomic stimulus.

A 2005 Congressional Budget Office study during the time that Republican Doug Holtz-Eakin was CBO director concluded that a 10 percent cut in federal income tax rates would recoup at most 28 percent of the static revenue loss over 10 years. And this estimate assumes that taxpayers have unlimited foresight and know that taxes will be raised after 10 years to stabilize the debt/GDP ratio. Without foresight and no compensating tax increases or spending cuts, leading to an increase in the debt, feedback would be negative; i.e., causing the revenue loss to be larger than the static revenue loss.

The 2003 Economic Report of the President during Bush’s first term stated (pp. 57-58):

Ã¢â?¬Å?Although the economy grows in response to tax reductions (because of higher consumption in the short run and improved incentives in the long run), it is unlikely to grow so much that lost tax revenue is completely recovered by the higher level of economic activity.”

The evidence shows the Bush tax cuts reduced revenue to the Treasury rather significantly. The claim since Reagan is that these tax cuts lead to more jobs and more workers and more revenues to the government....but that fails to happen.

In other words, the big deficits and debt run up by the Bushies are explained by unfunded wars, rampant deregulation of Wall Street.....and tax cuts.

Note to OTISdaDrunk: Get off the sauce.

OTISdaDrunk January 20th, 2011 | 10:05am

Yes: You could look at government revenues. They increased every year, year after year. If the tax cuts didn't help the economy grow then how can you explain how the government gave back money to the rich but the governments INCOME still increased? (not what they spent or borrowed but what they took in from taxpayers)

Yes January 11th, 2011 | 5:44pm

This is an update to a previous story, what is this.

Dahmius January 11th, 2011 | 5:45pm

How many yachts can you water ski behind Coran Gekko?

Coran Gekko January 11th, 2011 | 5:59pm

All of em!

dawg January 11th, 2011 | 6:01pm

Gee, maybe some developers have their eye on the Biscuit Run land and want this deal torpedoed.

confused easily January 11th, 2011 | 6:16pm

why was Tinsley at the announcement if he wasn't an investor?

cmorr January 11th, 2011 | 7:42pm

How sleezy!

Antoinette W. Roades January 12th, 2011 | 11:20am

small town, small minds:

Actually, given that Biscuit Run is in the county, "It's all 'so Albemarle'." What's "so Cville" is what's now afoot for the City intersection of Ridge Street and Cherry Avenue. Compare:

~~In 1999, Charles Hurt pays $90,000 for five parcels of land at Ridge-Cherry because a City Councilor who has no right to promises him two adjacent City-owned parcels to go with them.

~~In 2004, Hurt's subsidiary, Southern Development, unveils a plan for the five Hurt parcels plus the two City parcels, and the involved City Councilor, now Mayor, tries unsuccessfully to deliver the two City parcels to SD.

~~Between 2004 and 2007, SD presses various plans for the site but is repeatedly thwarted by neighborhood opposition.

~~In 2007, thwarted SD dangles aggressively "green" bait -- a massive, mixed-use project that looks like a community college campus but features "bird-friendly" window glass (which, of course, birds prefer to trees) -- and dazzled Councilors decide behind closed doors to sell SD the City parcels.

~~In 2008, despite continued neighborhood opposition, Council votes to sell the two City parcels to SD for $253,000, to be paid as a contribution to a Council-designated "affordable housing fund."

~~In October 2009, despite continued neighborhood opposition, Planning Commission and Council approve "William Taylor Plaza," which SD lists for sale days later for $2.3 million.

~~In October 2010, SD relists "WTP" at $1.8 million.

~~On 23 December 2010, some site neighbors are notified that City Council and Planning Commission will hold a Joint Public Hearing (which will be the only opportunity for anyone to be heard on the matter) to address a request "to amend the PUD" ("WTP") on 11 January. The notice is singularly lacking in detail. But repeated inquiry reveals that the requester is not SD, but William Park of Pinnacle Construction styling himself as "Contract Purchaser" of not only the five Hurt/SD parcels but also of the two City-owned parcels on which SD has never closed. And it also reveals that among amendments sought are the substitution of 20 "affordable" condos for the "monetary contribution" (i.e. the purchase price for the City parcels), an increase in the project size from 80,000-100,000 square feet to 120,000 square feet, and a retreat from the LEED certification cited in '08 as a primary justification for selling SD the City parcels.

So, if CC and PC approve this rushed, below-radar request -- now rescheduled (because Park wants more changes)for one-and-only hearing in February -- Park will get a project both bigger and badder than anything yet approved for the Ridge-Cherry site as well as two parcels of City taxpayer-owned land in exchange for nothing more than pricing 20 unneeded condos according to a twisted "affordable" formula. And CC's very good friends at Southern Development will get $1.71 million profit in exchange for nothing more than distressing a neighborhood for seven years.

As a neighbor adroitly observed: "This is nothing but a bailout for Southern Development." And that really is soooooo Charlottesville.

Old Timer January 12th, 2011 | 11:23am

Brad,

I think what irritates people is that the wealthy moan about how in a capitalist society they shouldn't pay taxes to subsidize welfare queens, yet here they are at the trough, for a lot more money than some welfare recipient.

Oh, yeah, definitely - Hunter Craig is a uber-liberal anti-capitalist. You cannot seriously assert that the C'ville/Albermarle development community - outside of social issues - is even remotely "anti-capitalist".

The Craigs - from Four Seasons on - have been churning out junk-boxes for a quick buck as fast as they can - they are the epitome of the "capitalist" land developers - and not "socialist" in any sense beyond trying to pawn off on the taxpayer any "exernalities" (schools, roads, sewer, water, etc.) they possibly can in order to maximize their private profits. They are hardly unique or alone in this, but it's not what you "right wingers" like to call "socialism" (that would be forcing the Craigs to pony up enough cash in proffers to actually pay for the additional costs their developments impose on the county).

Capshaw has been trying to turn a buck at anything and everything he possibly can since time immemorial. Hardly a socialist.

Boyd Tinsley is a former high-school nerd busy showing up all the people who he thinks slighted him as the first-chair-violin geek in the orchestra back at CHS - that's a big part of his media hound pursuit (along with making a buck).

I'd be very interested in seeing the details about who put up what share of the big bucks for Forest Lodge, LLC, before we start pointing fingers about the politics of those "feeding at the trough". Maybe the Hook can uncover that information.

Although the deal is a tad stinky - the developers clearly didn't have to eat all their popped-bubble losses - I'm not sure what the hullaboo is really about. Even after you take the tax credits into account, the cost to the state is quite a haircut, relative to what these guys paid for the place in 2005. Plus, it's a huge win for all of us to preserve a large space like this, close into the urban core of the city/county.

cookieJar January 12th, 2011 | 3:09pm

Antoinette W. Roades, I would be thrilled to have you on City Council if you are so inclined. Please consider it.

Hawes, are we going to get an article on what she wrote about? It seems very deserving of one to me.

? January 12th, 2011 | 3:20pm

Who is David Heilberg a "Legal Anaylst" for?

Old Timer January 12th, 2011 | 3:22pm

Ken,

I disagree with all liberal Democrats being hypocrites. These people aren't really liberal Democrats. Its the right wing that loves to label it so simply because they aren't Republicans. So they do things that make the right happy to make it look like they aren't so darned liberal.

A real Liberal Democrat couldn't get elected in this town.

Tim Kain is Blue Dog or Conservative Democrat, and I have never heard him portray himself any other way.

The way this whole scandal reads is that Democrats and Republicans have come together to once again, bail out the super wealthy.

Old Timer January 12th, 2011 | 3:27pm

Scott,

I think what is important here, be it Tinsely Craig, or whomever, is that it is not poor people feeding at the trough on this. It's a bailout for the investors at the taxpayers expense.

I also don't think its accurate to claim that this somehow has as of yet been saved from development. If I recall this land was all in conservation status before being sold off for development, and the developers had to pay the taxes for that. Correct me if I am wrong, but I beleive that's what occured.

small town, small minds January 12th, 2011 | 8:07pm

@antoinette

It's all the same "greater Cville area" to me.

Whether it's the democrats in the City or republicans and tree-huggers in the County, makes no never mind to me. They all kowtow to developers, favor the rich and well-connected and cr@p on the poor and underserved.

Reality Check January 13th, 2011 | 10:26am

Seconding cookieJar's request for an in-depth article on the William Taylor Plaza story, as well as Charlie Armstrong's ties to city government. A sidebar listing of developments that were sold to the city and residents, but turned out to contain "surprises" would be lengthy and illustrative.

City government continually makes the same mistake in assuming that developers who offer socially or environmentally responsible proffers are doing so because they are benevolent and charitable. So many of these proffers never see the light of day, and that's the intention. The Planning Commission serve as the enablers in these fiascoes.

There is a difference between city and county governments in that the city actually does care about the social and environmental mission, for the most part. This means they get repeatedly snookered by developers like Southern Development, the Piedmont Housing Alliance, and any random hipster who fancies himself a "green" builder. It's like watching a slow-motion trainwreck. The khaki pants and rep tie crowd in the county doesn't care one bit about any social mission, only about the bucks, and are blatant about it. (Then there are organizations like the PEC that play both sides against the middle, but that's another watery tale.)

That's because it wasn't sarcasm - it was a straight up ad-hominem against people who profess liberal values, and an attempt to somehow conflate liberal social values with corruption and self-dealing. A more intellectually "rigorous" and objective approach would not have garnered the same response, nor would it have reached the same spurious conclusion.

Very clearly, people of both political stripes try to justify their self-dealing (rather hypocritically) all the time - the list of "up by my bootstraps", "no government handouts", "private enterprise" mouthpieces who get rather fat off of handouts and preferential dealings from the government - at all levels of our government (local, state and federal) is very very long. We might start with Wendell Woods and his nice fat deals with the FedGov for otherwise unremarkable land for NGIC. Perhaps my point to you was too subtle: these "free market" types are constantly shoving off onto the government all kinds of "costs" which their "profitable" activities create - that's socializing the losses while privatizing the profits.

You are ignoring that Hunter Craig is one of the big principals here, and is one of Gov. McDonnell's big contributors and best buddies - you know, our very "conservative" (in every sense - Mr. Regent U) new governor.

@Old Timer

I think that feeding at the public trough is a despicable and well established (long) tradition in our country. It's taking from the poor and working to give to the rich. I'm not thrilled that these developers - and I still want to see what the makeup of the LLC was, because I'd bet dollars to donuts that you'll find quite a lot of the "Republican" pro-development deep pockets in it - right along with people like Kaine, Tinsley & Capshaw. In fact, I'd bet those are the folks who stood to gain the most financially.

That said: the cost to the taxypayers for this land, after you aggregate the tax benefits and the up-front cash, is less than what the LLC put in in 2005 - at least, that appears to be the case now. The only real stink - and I think this does bear looking into - is whether or not the value of the tax benefits and cash at the time of the transfer was higher than the fair market value. I think it looks like they thought they'd get to cherry pick their assessment and the state is pushing back on that - I'm very glad to see that.

My understanding - and *I* may be wrong - is that part of the deal is that the land had to go into a permanent conservation easement - which is quite different from the land-use tax shelter that the previous owners kept it in. That latter shelter did have some claw-back/recission provisions when the land was sold, but that is not an easement on the deed. I also don't think, once this is a state park, that there is any chance it will ever turn into a subdivision.

If, on the other hand, this hadn't happened, probably the land would not have been developed right away - maybe not for twenty years - it's hard to know how long the hangover from this bubble will last - but I think it very likely would have happened.

I think the land-use tax shelter is a good example of well-intentioned "liberal" (anti-development and as such, in fact, "conservative" in the strictest original meaning of the word) policy which in practice works out to be a huge benefit to the wealthy (who pay no taxes on very expensive estates), much like the home-mortgage interest deduction (which is an enormous tax subsidy for holders of ginormous mortgages on very expensive estates). Charlie Hurt has certainly made an art of parking his 'agricultural' land very cost-effectively for years and years.

I'm very sure any true conservative, wanting anyone to be treated equally and evenly before the law would insist that these subsidies should be eliminated immediately - the big estates (like Wendell Wood's "cabin" on Carter's Mountain) should start paying their full property taxes just like the rest of us do on our much more modest 'castles'.

Moreover, I'm sure any real conservative would agree the government should quit tinkering in the free market, creating distortions with perverse incentives, and eliminate the mortgage interest deduction - why is the government trying to push people into homeownership with these things instead of letting the market sort out who can really afford to own a home?

What say you Mr. Betts? Can we have a little ideological purity and consistency? Or is that "different" somehow?

Antoinette W. Roades January 13th, 2011 | 11:30am

Barbara Myer: I agree completely about using "Charlottesville" with precision. The distinction isn't just important, it's critical. Although many area residents aren't even aware that City and County are completely separate municipal entities, there's really no more influential fact of local life. The dividing line is utterly artificial, of course. But the practical results of how each entity is governed and by whom are very real.

FYI: One icy day last winter, while we huddled with the cat around the wood stove, we did the arithmetic and realized that our two-adult household pays more than 20 percent of its net annual income to the City in taxes. And we didn't need a review to count the ways in which our tax money is used to make life easier for many who have so much more than we do -- via PHA, for instance. Two years ago, when local real estate prices plunged 15 percent, the City assessor raised the assessment on a vacant lot we own more than 15 percent. And when we lodged formal protest, we were informed that the new assessment was justified by our lot's "market appeal." The experience, which included notable rude treatment, was thoroughly unpleasant. Still, it was good to have in writing proof that the City is in the real estate business.

N.B. In August 2009, non-voting Planning Commission member David Neuman described Southern Development's Ridge-Cherry project (aka William Taylor Plaza) as effectively "City-sponsored." He was correct.

Reality Check: And on that same subject, your analysis is right on point. You've obviously been paying close attention for a long time -- something few do, which is why such manipulation of system and sympathy can persist.

It had been clear to many of us since 2007 that SD's sole goal had become securing the two City-owned parcels -- which belong to all Charlottesville citizens, not just to denizens of City Hall -- and flipping the completed package. The listing of WTP immediately after its '09 approval bore that out. The sale contract that Council approved in '08 does allow for reassignment of the contract but only with the written permission of the seller, i.e. the City. If someone in City government has granted such permission -- which would be necessary for William Park to legitimately style himself "Contract Purchaser" of the City parcels and to legitimately petition for rezoning them -- without resort to public process, that permission-granter should be reassigned right out of a job.

WTP is eminently exemplary of the wretched excess of the devastating real estate bubble. It should be dying a natural death even as we type, not being resuscitated at taxpayer expense.

And Dahmius: Thanks for the thought. But, alas, unlike Huja, I have neither headgear nor hirsutism to muffle the snore.

Old Timer January 13th, 2011 | 2:25pm

S,

My understanding was that Breeden way paying lower taxes on it as it was in Land Conservation / Rural status. The developers who bought it had to pay the State back all the taxes that would have accrued had it been in developable status from the time it was put in Conservation.

This is what I recall hearing at the time. I could be wrong on that. To me, it was one more abuse of the system. A convenient way to have a tax shelter until you can shove it off on someone else.

If someone has better facts on that part I hope they will bring it to light.

S January 13th, 2011 | 2:49pm

Some recent article said something like now the Breedens are stuck with paying regular taxes on the Breeden "donut hole" in the middle. I was also thinking there is a rule that you only have to pay back 5 or 7 years instead of from the very beginning of a conservation special tax. (But I could be wrong on that)

Billy January 13th, 2011 | 3:19pm

Interesting, but predictable, direction this thread has taken-- a discussion on conservative vs liberal values.

A "true conservative" would insist that government stay out of a very large percentage of the issues that our government involves itself in, including land conservation, public amenities, land planning, promoting affordable housing, promoting organized zoning, the list goes on. A true conservative would say that those who have the bucks can buy whatever is for sale and do whatever they want with it. Want to turn Biscuit Run into a landfill? Buy it and you can. Want to put a "nucular" power plant on your land on Cherry Avenue? That should be your right!

But those of us who are moderate recognize the importance and value of good zoning, good planning, public parks, land conservation (where appropriate), and affordable housing so our community's poor and elderly can stay a part of our community and not get priced out.

Did the Biscuit Run people work the system and use an appraiser as their tool? Maybe. Was it unethical, illegal, just plain lucky, or all of the above? Who knows-- i don't have the facts. But that definitely needs to be looked into... it smells funny.

In any case, we the taxpayers should know what we're getting for our money BEFORE our money is spent. If our elected officials can clearly define what we're getting and what we're giving, then they need to make that decision. That's what we elected them to do every day-- make decisions. But if they don't know the cost, they need to keep their (our) wallets in their (our) pockets until they do know the cost!

Old Timer January 13th, 2011 | 5:49pm

S,

"Some recent article said something like now the Breedens are stuck with paying regular taxes on the Breeden Ã¢â?¬Å?donut hole” in the middle."

I think that was posted here in Hook and I do not dispue that as the current state of affairs. That does not mean it did not come out of conservation status, with the Breedens intending to profit off of it now it seemed more palatable to develop. Nor does it appear that Mrs Breeden does not want to develop it in the future.

If I am correct in saying it came out of conservation status, then I think it would be just deserts that they now have to pay full taxes on a piece of property they might not be able to develop for many many years to come.

democracy January 14th, 2011 | 8:15am

An interesting discussion.

My first thought is that Ken Betts either doesn't understand the difference between liberals and conservatives (possible), or that he has a partisan axe to grind (hmmm...) or that he is a devoted follower of the right-wing talk ranters, including Charlottesville's version, who consistently twist factual data and misinform their listeners. Perhaps it's a combination of the three.

Antointette makes a valid point: the city-county boundary is "artificial" but the "practical results are very real." Yes, the city has a higher real estate tax rate than the county. But so do many localities in the state, especially those that have a Composite Index that approximates both city and county. It's not been much of a secret that for years, a lack of affordable housing and social services (and jobs) have contributed to the movement of people from more rural areas to the city.

It is also no secret that urban areas require higher expenditures than do rural ones. The Joint Legislative Audit and Review Commission( JLARC) documented this fact in its 2002 report on the state funding of education. JLARC's study conclude, in part, that "higher population density may require more local spending in local government functions besides education, meaning that less local money would be available for education."

JLARC went on to identify three such government functions: (1) public safety, (2) public works, and (3) health and welfare. The city-county revenue-sharing agreement recognized this truth years ago.

It's also true that developers are in business to make money. Some are more socially conscious and responsible than others. Some have few scruples and watt to make as much money as they can while putting as little into their projects as possible; some use cheap, shoddy materials if they can get away with it, and some try and foist as much of the cost of their construction onto taxpayers as they can. But make no mistake; development has a cost.

Antoinette seems to think that the city council is in the pockets of Charles Hurt, a developer. Perhaps. But Hurt spreads his personal campaign contributions around almost equally between Republicans and Democrats (after all, he builds in both city and county). Hurt also contributes substantially to the Monticello Business Alliance, a political action committee made up primarily of builders. Over the last five years, that PAC's contributions are heavily tilted to Republicans, and there is a reason for that.

There are multiple issues related to the Biscuit Run tax credit scandal, and I think that word is entirely appropriate. Those who bought the tract of land for $40-plus million hope to build more than 3,000 homes and turn a keen profit (the development came with extended local government costs). They planned to profit from "the market." However, when real estate values went south, they got caught with an over-valued piece of property. They were going to default on their loans.

Clearly, some skids were greased to enable the state to purchase the property. Just as clearly there were other, larger and less expensive properties to buy. The state paid what was termed "market value" for the property, while the Virginia tax department valued the property much higher. That higher valuation inflated the tax credits the owners were eligible for, and thus increased the taxpayer subsidy. But that wasn't enough for Hunter Craig and his free-enterprising associates.

They got an appraiser in Orange to say the parcel was worth TWICE as much as they paid for it at the height of the real estate bubble (one has to ponder not only the character and methodology of that individual, but also whether or not the appraisal is allowed to stand). That grossly-inflated individual assessment could mean even bigger taxpayer-subsidized tax credits for "investors" who allegedly believe in the" free market" except when it works against them.

And there is the hypocrisy. Businesses and individualsÃ¢â?¬â??Ã¢â?¬â?? mostly conservative, and Republican Ã¢â?¬â??Ã¢â?¬â?? who hail the merits of the "free market" and rail against "socialism," and "welfare," avidly seek taxpayer welfare for themselves. The last thirty years are a testament to that hypocrisy, and it's intensified the last two years (one need only to review the bailouts of the big banks and hedge funds, or the positions staked out by the u.S. Chamber of Commerce) .

But a hypocritical me-first, gorge-from-the public-treasury, say-one-thing-and-do-another, approach to governing is not one of them.

NancyDrew January 14th, 2011 | 9:06am

@democracy I continue to be enlightened by your thoughtful comments. Thank you

Antoinette W. Roades January 14th, 2011 | 11:03am

democracy:

Antoinette does NOT think that City Council "is in the pockets of Charles Hurt..."

Antoinette knows that City Councilors of recent years have been in thrall to Charlie Armstrong, the current public face of Dr. Hurt's subsidiary Southern Development. Armstrong adroitly combines his mentor's preternatural fixity on what's good for him and his with personal fluency in all the fluff that makes modern Councilors and their appointees on Planning Commission and BAR go weak at the knees. Which is to say that Democrats who seek City office and/or appointment these days don't need cash contributions in return for granting a perpetual free pass through the system. Frequent opportunity to discuss ad nauseum burning issues like the number and location of bike racks in a building -- as happened at several Ridge-Cherry hearings -- is sufficient payoff for them

N.B. At the same time he was assuring Councilors and PC members that he was as devoted as they to abundant bicycle accommodation, Charlie Armstrong was posting on a General Assembly-watch website (RichmondSunlight) re pending legislation: "The current proffer system is little more than legalized bribery." As I said.

And a fun footnote: The whole Ridge-Cherry situation actually stems from a brief period at the end of the '90s when Dr. Hurt spent time in the pocket of Maurice Cox -- something to behold, I assure you -- and I don't doubt that he has since repented of taking that ride.

democracy January 14th, 2011 | 11:27am

Antoinette raises an interesting point about Charlie Armstrong, late o Real Estate III, the Frank Kessler company that sold off much of what Kessler developed (and he developed quite a bit).

She also points out, and indirectly corroborates my point, that there are many who talk out of both sides of their mouths, and undermine and contradict what the say with what they do. She cites Armstrong individually while I've cited Hunter Craig and his Biscuit Run investment cronies locally, and more expansively, the conservatives at the state and national levels who talk-the-talk about "big government" and "welfare," all the while pushing big government programs, policies and spending that pump money from public treasuries into their corporate and personal accounts.

However it's sliced or diced, it's hypocrisy. It's insidious.

And if it ends up contributing to the general welfare, it's by happenstance, and/or because it feathers someone's bank balance.

warnBond January 14th, 2011 | 1:29pm

You all are doing such a nice debate. Why do you have to taint the whole discussion with "conservative vs liberal". There are lots of bad conservatives, lots of bad liberals, lots of bad Catholics, lots of bad Jews, lots of bad white people, lots of bad black people. There are lots of bad people and it has NOTHING to do with anything other than their character. The great thing about our system is that the more arrogant they become the harder they fall (eventually). Stick to the point and the truth will prevail. Muddy it with other issues and the whole point is lost.

Just my thoughts

Antoinette W. Roades January 14th, 2011 | 1:56pm

democracy:

FYI, Charley Armstrong of Real Estate III and Charlie Armstrong of Southern Development are two different people.

RTGreenwood January 14th, 2011 | 2:51pm

Boyd Tinsley from the Hook Jan 8, 2010

Ã¢â?¬Å?It was a very pleasant surprise (the Biscuit Run sale to the state),” he said. Ã¢â?¬Å?Any loss we’ve taken pales in comparison to the contribution we’ve made to the community.

-----------------------------------------------------

Boyd Tinsley from the Hook Jan 13, 2011

"....TinsleyÃ¢â?¬â? who spoke about his close personal friendship with Governor Kaine and said he’d learned about the transaction only weeks before the eventÃ¢â?¬â? never had any money invested in Biscuit Run."

Bill Marshall January 16th, 2011 | 6:16pm

Democracy: I do offer facts. watch this youtube video

Caseoniea, I believe you are confusing conservatives with crooks who use conservatives to get their way.

I am not defending republicans but I do believe that conservative principles (when followed) will prevail everytime.

Trickle down economics can work just fine if congress didn't spend more than they took in. The tax cuts INCREASED federal revenues because of the spurred economic growth.

Its simple: If you increase the taxes on a service station by 15k and give it to a family of 4 in rent subsidy and food stamps you have saved 4 people for a year. If a gas station gets an investment tax credit he can spend that 15k on a new tire machine and balancer for the business that was designed by an employed person, built by an employed person, packaged, shipped and delivered by employed people. In addition to that the salesman, accountant, raw material suppliers, etc all benefit. Assuming he can now expand into the 24" tire business he will generate more income and pay more taxes.
He might even need a new employee because his business grows.

But taking the money and letting people stay home and watch TV will probably fix all of our woes too.

Investment tax credits are the governments way of paying people to work. Welfare is a way of rewarding them for not working.

Trickle down would work fine of congress would simply stop spending all they get and then some.

democracy January 17th, 2011 | 7:25am

@ Bill Marshall

Please! You offer up a highly selective and edited youtube video that is designed to skewer Nancy Pelosi and obscure the real reasons for the mortgage crisis, the peddling of toxic, collateralized securities, the rampant deregulation of Wall Street effectively allowing it to become one big casino, the piling up of huge budget deficits and the ballooning of the national debt, and the broken economy.

Nancy Pelosi didn't do those things. Your conservative brethren did. And they refuse to acknowledge any responsibility for it. Mark Twain once said that "a man is never more truthful than when he acknowledges himself a liar." That is exactly what conservatives should do....but, of course, they won't.

They lied continually about the health care reform legislation. They continue to lie about it now, claiming, falsely, that the law will "kill" jobs. This from a group whose policies drove the American economy to the brink of collapse, caused millions of job losses, and resulted in millions of home foreclosures.

You want to believe, against all evidence, that Nancy Pelosi and "liberals" are to blame. But every credible study on the subprime mortgage meltdown fails to cite Fannie and Freddie as culprits. All agree that both came late to the toxic mortgage party. One study found that 60 percent of all mortgages sold to Fannnie/Freddie by Citigroup were toxic, yet Citigroup, aided by Wall Steret ratings agencies, termed them AAA. the top grade. They weren't.

I noticed that you only took exception to one part (the mortgage crisis) of what you called my "rant." Presumably, then, you agree with the rest (Or perhaps you find that what I've stated is, in fact, supported in the public record. And it is.). The rest is a very strong indictment of conservative policies, and of conservative "values."

You selected a partisan, selectively edited youtube video to try and make your argument for you. Utter failure. I've got one for you too, one that is quite appropriate for today, but one that captures the essence of the points I've made here, and elsewhere. Yes, the video is edited...but I think even you will agree that is done with historical accuracy.

The political and spiritual leaders in the video all had their personal character flaws, but all were committed to something that was far bigger than themselves; they all believed in and were committed to the core values that define democratic societies, and each of them tried to move this nation closer to realizing those ideals. Conservatives of their times fought them at every step and turn. That alone, Bill (and other conservatives), should give you pause; and perhaps cause you to reflect. (Pssst....and Bill, tax cuts do NOT pay for themselves. Another big lie.)

Bill - your source basically showed that the wealthy paid a greater share of taxes over time in the 1980s. This basically means that the wealthy were improving economically in Reagan's America at a faster rate than the country as a whole. Nobody ever disputed that.

Old Timer January 17th, 2011 | 11:31am

Bill,

Naturally like every other Neo Conservative you associate welfare with poor people getting food stamps, and never with the biggest recipients of all, big corporate America. Many people who get food stamps do work, doing those minimum wage tire changing jobs you claim will somehow be created from trickle down economics.

Naturally if we are going to cut government, it should be with basic sustinance programs, never the bloated defense budget, or from big business. Welfare ends after 2 years with the poor person on the street in a minimum wage job, but keeps going year after year for Halliburton, and Raytheon, and corporate farms who somehow manage to never pay taxes, while the small business does. How appropriate that today marks an important anniversary with Eisenhower's great warning about the military industrial complex.

You are going to have to accept that the numbers just don't go along with your premises. Massive tax breaks for the wealthy starting in 2001 did not create jobs in the US. A total of 1 million jobs were created before 8 million were lost. The Real Estate bubble, brought on by the Neo-Cons, created a lots of temporary non benefit underpaid jobs for a large underpaid illegal immigrant population, who took their dollars home to spend. Now those jobs are gone. By contrast, Bill Clinton created 22 million jobs, mostly skilled, and an environment where business invested in America in a way it hadn't in a long time. And he did so while raising taxes.

So where were the jobs 2001 -2008? Hmm? Let's say we hadn't invaded Iraq and hadn't borrowed the money, while handing out massive tax breaks. What would have corporate America sold to American then? Tell us. Because I agree the government competes for money and the labor force, but you tell us what jobs would have been created magically, without demand.

Ron Paul is the only man on the 'conservative' side of the fence who might actually understand what some of that means and could make it work if it was possible.

And yes, you are defending the Republicans, by continuing to put forth their economic policy and false beliefs that welfare recipients are all lazy poor people, when 30 years showed it to be bogus.

Yes January 19th, 2011 | 3:40pm

Again, do the supply siders actually have any empirical evidence for their claims?